On Monday, Oak Bay council passed a motion to move a portion of sewage charges from the water bill to the tax bill. Now, the CRD post-2006 sewer debt costs will be allocated such that 30% will be on taxes and 70% will be on water consumption. This is a change from the current structure of 100% based on water consumption.
Councillor Kevin Murdoch brought this motion forward, citing that the goal of cost allocation for services should at all times strive to be fair, transparent, and reflect the cost of services provided.
With 28% year-over-year growth of the CRD sewer costs putting more and more money onto the water bill, the issue was a frequent debate in council meetings as to whether it was best tied to the user pay model of water consumption.
“So in 2004 when this first started being allocated onto the water bill, sewage was about 4-5% of the water bill. In 2010, it was about 11%. We are at about 45% now and it keeps going up and up and up, to the point where about 70-80% of everyone’s water bill is going to be just the capital portion of the sewage treatment at the CRD. Nobody’s use of water affects the close to billion-dollar capital build cost of that plant,” says Councillor Murdoch.
The motion recognizes that some sewage cost is based on water consumption but that the vast majority of the costs are due to a large fixed-capital project, the sewage treatment plant. The plant is not going to change in cost whether people use more or less water.
While the change in rate allocation will result in very little change to what residents pay (the difference for an average household between the current model and the new one is $0.29 per bill), the new allocation will do two things:
• Allow seniors to defer the tax portion (30%)
• Improve visibility of rate increases
With increasing sewage costs, a question of ability to pay arises. When the cost is on the water bill, it can’t be deferred. Moving some of it back to taxes allows seniors to defer the tax portion of the payment. This helps elderly in their ability to stay and age in place.
In terms of visibility, a water bill does not show what you paid last year and what you paid this year. There is no comparison to show increases. On taxes, it shows when rates increase and shows comparisons to prior years. Having it split on the water bill and taxes will make it more transparent.
While the vote on the motion was almost unanimously in favor, Mayor Jensen was opposed, feeling both that it is more transparent in its current format, and that having it tied to water consumption, encourages residents to use less water.